Trump Dampens Euphoria over China Trade Talks

The hype over the issue notwithstanding, even the US President Donald Trump is not expecting much from the proposed trade talks with China later this week in Washington. Interestingly, the new US tariffs on $16 billion of Chinese goods will be officially put to effect at 12:01 a.m.(0401 GMT) on Thursday, simultaneously with retaliatory tariffs from Beijing on an equal amount of US goods. The proposed Washington talks will be led by the US Treasury Undersecretary David Malpass and the Chinese vice minister of commerce Wang Shouwen. While the tariff war has been leaving large impacts on the market, the US President’s remarks over not expecting much from the talks would also have serious impacts on the market- even the Asian markets, analysts feel.

Sageraj Bariya, Vice President - Institutional Sales, East India Securities Ltd, said that contagion worries continue to have an impact on investor risk sentiment, especially in emerging markets, with 'risk-on and off' trading strategies dominating proceedings. Dollar nosedived on Tuesday in Asia after Trump had hit out at the Fed's interest rate rises and accused it of not backing his economic plans while accusing EU and China of manipulating their currencies. The US markets managed to end in the green, with Dow continuing its strong rally. The markets had witnessed broad gains on the previous day. Subsequent to that, Asian markets are mixed as traders turn their attention to the China-US talks which are slated for Wednesday and Thursday, which seems are aimed at smoothing the way ahead of a November summit. However, given the little progress made on the negotiations in the past six months, a sustainable agreement to end this tension still seems unlikely at this point and investors' expectations are still low. Domestic markets are likely to have a muted opening on the back of lackluster global cues, he said.